Aditya Birla Group has approved to raise capital through right issues of shares at a face value of rupees 2 for its subsidiary company.
With the market capitalization of Rs 1,29,846 Crore, Grasim Industries a unit of Aditya Birla group, closed the Tuesday trading session on a positive note at Rs 1,974 and opened today’s trading session almost flat at Rs 1,980.
Flat Opening was observed after the board approved to raise Rs 4,000 crore capital through right issue of shares at a face value of Rs 2 on 16th october. The fundraise was approved one month after the company announced entering into the paint business under the brand name ‘Birla Opus’ in the fourth quarter of fiscal year 2024.
Further, the company also stated that it will be investing 100 billion rupees towards setting up the paint business which controls half of the market share in the sector.
The proposed right issue by Grasim aims to fund the ongoing capital expenditure plan, repay existing borrowings, and support general corporate purposes. The company is implanting its highest ever capital expenditure plan. The fund raised by the issue will be largely used towards the growth of capex.
The capital outlay for the company is to establish itself as India’s second largest decorative paints player on the track. Furthermore the company is committed to sustaining in its core business. The rating agencies continue to reaffirm Grasim’s ‘AAA’ ratings.
After inspecting the consolidated financials reports, Grasim has given good returns to its investors.
The consolidated net profits were recorded at Rs 1,576 crores in the last quarter. Coming to the profitability ratio, Return on equity (RoE) has decreased to 14.41 percent in FY 22-23 and Return on Capital Employed (RoCE) was at 12.63 percent during the same period.
According to the latest shareholding pattern, the company’s promoters hold a 42.88 percent stake , 24.24 percent is held by the public (Retail Investor) and the remaining 33.01 is held by FII, DII, and others.
Grasim Industries Limited is a flagship company of Aditya Birla Group. Today it is a leading player in VSF and a prominent producer of Chlor-Alkali, Linen Yarn and fabrics in India. Recently it has entered into the paint business and also set up a B2B online marketplace for building marketplace.
Written by Vaibhav Patil
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